Investment Pick for year 2010 after sucess of COMPACT 15, SOLID-15,QUICK15+6, FANTASTIC-12, ARG 30, VALUE24
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http://akprabhakar.blogspot.com http://tanmaygopal.blogspot.com http://prabhakar-views.blogspot.com A K Prabhakar – [email protected]fabulous-15 -> stocks for Year 2010 After smashing success of previous lists – COMPACT 15, QUICK15+6, SOLID-15, FANTASTIC-15, VALUE-24, ARG 30 I recommend a new list of stocks chosen with great care after markets have given more than 80% returns and some of our stocks giving more than 300% gains. The stocks chosen are included as they provide Value and a good margin of safety. Year 2010 in my view would give negative returns on Index basis and individual stock performance would be brilliant. So we must divide the risk equally and 20-30% returns annually would also be very good given stretched valuations for our markets when Nifty trades above 23 P/E and world interest Rates near zero. Indian economy is expected to clock GDP growth near 8% but a Fast-growing economy has its own pitfalls like inflation which we are already facing and supply constraints also can lead to market correction. This list I present to you to use on investment basis to accumulate over 1-2 year period and it would be a golden opportunity if broader markets correct even 10-15% from current levels.
After smashing success of previous lists – COMPACT 15, QUICK15+6,SOLID-15, FANTASTIC-15, VALUE-24, ARG 30 I recommend a new list ofstocks chosen with great care after markets have given more than 80% returns andsome of our stocks giving more than 300% gains. The stocks chosen are includedas they provide Value and a good margin of safety. Year 2010 in my view wouldgive negative returns on Index basis and individual stock performance would bebrilliant. So we must divide the risk equally and 20-30% returns annually wouldalso be very good given stretched valuations for our markets when Nifty tradesabove 23 P/E and world interest Rates near zero. Indian economy is expected toclock GDP growth near 8% but a Fast-growing economy has its own pitfalls likeinflation which we are already facing and supply constraints also can lead tomarket correction. This list I present to you to use on investment basis toaccumulate over 1-2 year period and it would be a golden opportunity if broadermarkets correct even 10-15% from current levels.
3IINFOTECH is a global Information Technology company whichprovides technology solutions to over 1,500 customers in more than 50countries across 5 continents, spanning a range of verticals - Banking ,Insurance , Capital Market , Mutual Funds , Government, with 8% ofthe revenue coming from ICICIBANK. RBI guidelines suggest bankingcompanies holding not more than 5% stake in non-core activities andICICI bank holds controlling stake in 3i Infotech. Talks for acquisitionof ICICI Bank Ltd’s controlling 27% stake in 3i Infotech Ltd haveveered to a likely price range of Rs 110-120 a share, sources toldNewsWire18.
Largest Private Sector Shipbuilding Yard in India Certified by DNV forISO 9001 - 2000. The shipyard has delivered 104 specialized andsophisticated vessels. 90% of the vessels built in last two years wereexported. The company has Order in hand over Rs. 12,500 croreswhich are to be serviced until 2014. The company is investing 16 billionrupees to build a new facility at Dahej in the western state of Gujarat.The facility will include a unit to build jackup oil rigs. "About 85% of thefacility is complete," he said, adding that the entire facility including anew ship lift should be ready by June.
ADHUNIK METALIK is an integrated special steel producer and iron oreminer. It is venturing into the power business through its subsidiary, APNR.Adhunik Metalik is flagship company of the Adhunik group and engaged in theproduction of value Added Steel, Alloy Steel and Stainless Steel productscatering to the automobile, construction engineering and household industry.The Company strongly focuses on reduction of production cost and zero wastemanagement. Adhunik will be merging group companies Vedvyas and MPIspat, which will bring 120,000tpa of coke oven capacity and 120,000tpa ofsponge iron capacity. Consolidated profits may grow by more than 50% CAGRin the next 3 years to 2012 on account of growth in steel production and ironore mining. The company has raised capital from QIB as well as promoters anddebt-equity ratio may go below 2 in March2010 from 4.9 in March 2009.Adhunik’s captive iron ore mines in Orissa have received environmental andforest clearance. Final mining lease is expected soon. Margins are likely toexpand due to significant savings.
EMCO offers Transmission and Distribution solutions in Power Sector. Itis amongst top 3 transformer companies in India with 20000MVA capacity.Order Book at 30 Sep 2009 was Rs 1600Cr and company plans to doubletransmission tower capacity from 45000MT to 1 lakh MT. India isexpected to add a generation capacity of 62000MW on certainty basis in11th Five-year plan and against this the country has added just 14337MWin first two and half years ending Sep 2009. Thus to capacity to be added inthe remaining two and half years will be over 45000 MW. This translatesinto a capacity addition of about 19000 MW per annum.
GIC Housing Finance Limited, was promoted by General InsuranceCorporation of India and its erstwhile subsidiaries namely, National InsuranceCompany Limited, The New India Assurance Company Limited, The OrientalInsurance Company Limited and United India Insurance Company Limitedtogether with UTI, ICICI, IFCI, HDFC and SBI. GICHFL has presence in 27locations across the country for business. Housing being the one of theessential needs of mankind, the demand for shelter grows in line with theincrease in population and the standard of living, hence the need of financingthe purchasing of a House came up. A growth stock with one of the bestDividend Yields in Indian stock market!
Glenmark Pharmaceuticals Ltd is a research-driven, global, fully integratedpharmaceutical company which employs over 4100 people across its globaloperations. The Company is a leader in India in the discovery of new molecules(Both NCES and Biologics) and is focused in the areas of inflammation[Asthma/COPD, etc] and metabolic disorders [Diabetes, Obesity, etc]. TheCompany has branded generic formulation interests in over 95 countries acrossthe world including India, Europe, Brazil, Rest of Latin America (excludingArgentina), Russia/CIS, Africa and Asia. Glenmark Generics Limited (GGL), is asubsidiary of Glenmark Pharmaceuticals Limited (GPL) that aims to be a globalintegrated generic and API leader. GGL has an established presence in NorthAmerica, EU and Argentina and maintains marketing front-ends in thesecountries. GGL has a strong base in Formulations development with teamsoperating out of laboratories in India and Latin America. GLENMARK hasannounced plans of IPO for Glenmark Generics which would benefit the parentcompany.
Greaves Cotton Limited, established in 1859, is one of India's leading andwell-diversified engineering companies. It manufactures a wide range ofindustrial products to meet the requirement of core sectors in India andabroad. The company's core competencies are in Diesel/Petrol engines,Gensets, Agro Equipment and Construction Equipment. Recently thecompany forayed into earth-moving with the launch of its Wheeled LoaderCG 932 H. It has also tied up with Mitsubishi Heavy Industries Limited,Japan, to market its range of Motor Graders in India. Greaves Cotton,presently, is the only Indian manufacturer to offer a range of products inconcreting as well as compaction segment. With the inclusion of these twonew products in the earth- moving segment, it will have an exclusive positionas a supplier for the contractors involved in road building, irrigation and otherinfrastructure development projects.
GSPL, a GSPC subsidiary, has taken a lead in developing energy transportationInfrastructure in Gujarat and connecting major natural gas supply sources anddemand markets. Gujarat State Petronet Limited is first company in India totransport natural gas on open access basis and is a Pure Natural GasTransmission Company. The transmission network of the company envisagesdevelopment of systematic and seamless pipeline network across Gujaratconnecting various suppliers and users. The suppliers of natural gas includetraders, producers and LNG terminals. The users comprise industries such aspower, fertilizer, steel, chemical plants and local distribution companies. TheIndian natural gas market is relatively underdeveloped compared to otherregions of the world. By the years 2024 to 2025, the share of natural gas wouldincrease to 20% of total primary energy consumption, according toHydrocarbon Vision 2025.
Coal is becoming a precious commodity day by day because of scarcity of the fueland Gujarat NRE Coke is the largest independent producer of Met Coke in Indiaand is the only Indian company with coking coal mines in Australia having morethan 500 million tons of Metallurgical Coal with excellent coking properties. Thecompany is set to emerge as one of the largest coking coal producers in Australiaover the next few years. The coal mines are owned through its subsidiaries –Gujarat NRE Minerals Limited (ASX:GNM). The company has 87.5 MW windpower energy and has also set up mini steel mill in Gujarat to recycle steel scrapsusing green wind energy to manufacture TMT Bars.
IFCI was established in 1948 by Government of India to cater to the long-termfinancial needs of the industrial sector. But because of inefficiency the companyfelt severe drop in performance but now Government of India is trying hard toget the organization back on track as it holds Rs 523 Cr of optionallyconvertible debentures in IFCI but no stake, largest stake holder is LIC with8.39% holding. News reports say that the government may appoint a consultantto rejig IFCI's business operations soon and the stock is a good investment atcurrent levels. IFCI holds more than Rs 1200Cr value of equity shares invarious listed companies along with important stakes in many unlistedcompanies which would give it a fair valuation if the company gets sold ormerged into some other company.
MRPL is a State of Art Grassroot Refinery at Mangalore and is a subsidiaryof ONGC. The Refinery has got a versatile design with high flexibility toprocess Crudes of various API and with high degree of Automation. MRPLhas a design capacity to process 9.69 million metric tonnes per annum and isthe only Refinery in India to have 2 Hydrocrackers producing PremiumDiesel (High Cetane). It is also the only Refinery in India to have 2 CCRsproducing Unleaded Petrol of High Octane. MRPL has been running itsrefinery at a sustainable 125% utilization level since FY05, one of the highestamong domestic peers. MRPL is increasing the capacity of its refinery to300,000 barrels per day from 193,800 barrels at an investment of Rs 12,400crore. The stock looks great on technical charts and with strong managementlike ONGC as parent the company is expected to outperform in near future,negligible net debt/equity ratio would help ease debt burden of Rs 10000Crneeded for expansion.
The main core activity of NLC is Lignite Excavation and power generation usinglignite excavated. Lignite is the younger offspring of the coal family. It is a fossilfuel belonging to the Miocene age (25 million years). NLC is having three lignitemines, also raw lignite is being sold to small scale industries to use it as fuel intheir production activities. NLC is generating power in its Thermal Power StationI, Thermal Power Station -II and in Thermal Power Station I Expansion. All thesouthern states are beneficiaries of this power generation project. Today NLCPower Stations are generating about 2490 MW of Power. NLC's Power Stationsare maintaining very high level Plant Load Factor (PLF) when compared to theNational average. Disinvestment can improve liquidity for the stock and avaiablityof raw meterial is a concern which NLC has in plenty.
POWERGRID, a Navratna Public Sector Enterprise, is one of the largesttransmission utilities in the world. POWERGRID wheels about 45% of the totalpower generated in the country on its transmission network. It has a pan Indiapresence with around 71,500 Circuit Kms of Transmission network and a totaltransformation capacity of 79,500 MVA. POWERGRID has also diversified intoTelecom business and established a telecom network of more than 20,000 Kmsacross the country. POWERGRID has consistently maintained the transmissionsystem availability over 99% which is at par with the International Utilities. Thestock has remained considerably silent given run-up in the market and is a value-buy at CMP.
SKNL is one of India’s leading textile and apparel company with expertise in multi-fiber manufacturing. The company has extended its presence in multiple productcategories from Fabrics to Apparels and Home Textiles. From a turnover of Rs.5million in 1948, today, the group has come a long way in achieving a turnover of Rs.17 billion. Brands include popular names such as Reid & Taylor, Belmonte,SKumars, Carmichael House and Stephens Brothers.
Conceived in 1995 with just 20 people, Suzlon is now a leading wind powercompany with over 14,000 people in 21 countries and operations across theAmericas, Asia, Australia and Europe. It is now a Market leader in Asia and 3rdlargest wind turbine manufacturer in the world, Suzlon Market Share (Combinedwith REpower) rose to 12.3% thereby making Suzlon 3rd largest wind turbinemanufacturing company in the world. India is a power deficit country and thetraditional sources of power are dwindling with reducing reserves of coal and watershortage. India would be betting on renewable and alternate sources of energy likeWind Power and nuclear power to grow on a sustainable basis. Alreadygovernment of India has declared subsidy scheme for Wind Power companies-Wind power projects will be given 0.5 rupee for each unit of power fed into thegrid with a ceiling of 6.2 million rupees per MW for a minimum 4 years andmaximum 10 years. The incentive would increase the internal rate of return ofprojects by at least 3-4% which would give way to more orders for large players likeSUZLON.
HaPPY iNVestiNG!Disclaimer:This represents views based purely on Technical, Fundamental, news, data and event based studies. Theinformation and views presented in this report are prepared by A K Prabhakar. The information containedherein is based on my analysis of the Charts, Company Announcements and upon sources that I considerreliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is forpersonal information and I am not responsible for any loss incurred based upon it. The investmentsdiscussed or recommended in this report may not be suitable for all investors. Investors must make theirown investment decisions based on their specific investment objectives and financial position and usingsuch independent advice, as they believe necessary. While acting upon any information or analysismentioned in this report, investors may please note that neither A K Prabhakar nor any person connectedwith him accepts any liability arising from the use of this information and views mentioned in thisdocument. A K Prabhakar and his affiliates may hold long or short positions in the above-mentionedcompanies from time to time. The report is intended for a restricted audience and I am not soliciting anyaction based on it. Neither the information nor any opinion expressed herein constitutes an offer or aninvitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives relatedto such securities.
